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In the world of capital markets, 'January Effect'
is a situation where stock prices increased significantly in the month of January.
There are several things that could explain this phenomenon, like because the
investor is usually fresher and more eager to buy stocks after a long holiday
(Christmas and New Year), the beginning of a year is almost always fulfilled
with optimism, and because companies usually pay dividends in the first half,
precisely in April – June, so investors will have taken a position in the stock
in question in advance, starting in January.

If you often travel throughout Indonesia by plane,
you must be familiar with the famous Lion
Air.. but ain’t famous in a positive sense, but famous as an airline that
sucks, where its flight schedule are often delayed. Because of its bad
reputation, when several years ago I began to travel frequently by plane, I
deliberately avoid Lion Air and prefer other airlines like Garuda Indonesia,
Air Asia, Citilink, and Sriwijaya Air. And indeed, I have never been in trouble
with those airlines, especially with Garuda which always provided excellent
services (though its tickets also not cheap).

When studying the data of economic growth for the
third quarter of 2015, I was confused by the fact that the level of national
consumption still grew 4.96%, or above the overall economic growth of 4.73%,
whereas the prices of goods clearly soaring, and it should lower the purchasing
power of people. But as far as I could observe, almost everybody is still
happy, and even the workers still dare to protest to demand higher wages. The
question is, how can it be?

Most people assume that
the pharmaceutical industry, just like other consumer industries, is resistant
to the risk of economic slowdown, so companies in this industry should have a
consistent financial performance from year to year, thus the stocks are also good
for long-term investment. Because, logically, if you get sick, you inevitably
have to drink/consume a particular drug, right? Even though the price of the
drug is probably expensive.

Last night, the general
meeting of executive directors of the International Monetary Fund (IMF) decided
that the chinese currency, Yuan (also called Renminbi), to be included as one
of the world reserve currency, effective from October 1, 2016. In the new calculation
of special drawing rights (SDR), Yuan weighs 10.9%, or greater than the weights
of Britain Pound Sterling or Japanese Yen, but still much lower than the weights
of US Dollar and Euro. You can read the explanation of SDR in this article.

The term 'koppig' comes from Dutch language which
means stubborn. It was first pinned by Sukarno, Indonesia's first president, to
Ali Sadikin, the then Governor of Jakarta, for his tough stance in building the
Capital. Ali was a controversial figure who built infrastructure in Jakarta
using the money generated from gambling business, but he never step back though
his leadership is opposed by many people. Even at that time, Ali often slap his
incompetent subordinates using his own hands, and all of the City officials
were afraid of him.

In Wednesday, November
11, 2015, the Indonesia Stock Exchange (Bursa Efek Indonesia, BEI) suspended three
brokerage houses from stock trading activities, namely Danareksa, Millenium
Danatama, and Reliance, because the three were allegedly ‘not to performing an
adequate procedure of internal controls’. BEI execute the suspension after
receiving a report from the Financial Services Authority (Otoritas Jasa
Keuangan, OJK), that the three were involved in ‘pump and dump’ activities related
to Sekawan Intipratama (SIAP), a
small-cap stock, which causes huge losses for many retail/institutional
investors in the market.

As one of the most prominent players
in the industry of fast
moving consumer goods (FMCG) in
Indonesia, the
IPO of Kino Indonesia (KINO) may be interesting, because we know that companies in the
field of FMCG usually have a stable performance in the long term. And KINO itself has a good reputation as
an innovative company that always
create new consumer
products, while its
founder, Harry Sanusi, is well known
as an
inspiring entrepreneur
who
successfully founding and developing company from scratch. Okay, let’s
get it on.

Last night before going to bed, I, as usual,
browsed the internet on the phone, and I come to a website and forum about jobs
and careers. When I go into a forum for jobs for entry level (fresh graduate or
experienced 1 – 2 years), I noticed something: Everybody talks about, how much salary in company A? If l made it to be
appointed as a permanent employee, how much my take home pay will be? What are the
benefits beyond salary?

When the Government launched the package V of
economic policy, one of the policies is tax incentives for companies that
perform asset revaluation. Normally, the company must pay income tax of 10% for
the increase in value of assets due to revaluation (the difference between the
value of assets before and after the revaluation is considered as corporate earnings),
but now the tax is 3 – 6% only. This policy is expected to encourage companies
to revaluate its assets such as land, buildings, etc, where the value of these
assets will usually rise, and eventually raise the value of net assets/equity
of the company as a whole.

Until the third quarter of 2015, Bank Negara Indonesia (BBNI) posted net
earnings of Rp6.0 trillion, down 21.2% over the same period in the previous
year, and its ROE was only 16.1%, also down compared to the previous period of
22.7%. Although it looks bad at first glance, but when the financial statements
released on October 16, BBNI shares remained in its position, ie Rp5,100 per
share, and now it is already at 5,250. And although the stock was once dropped
until 4,000 when the Jakarta Composite Index (JCI) was under attack in last
September 28, but it quickly rose back until reached 5,000 in just two weeks
later. So maybe BBNI is not that bad?

Logo of Bank BNI with its slogan: Serve the country, the pride of the nation

On 5 November, the Indonesian Central Statistics
Agency (Badan Pusat Statistik/BPS), released the rate of economic/GDP growth for
the third quarter of 2015, which is 4.73% y-o-y. The rate, though still below
the expectations of the Ministry of Finance and Bank Indonesia of 4.8 – 4.9%,
but it’s better than the second quarter, which was only 4.67%. And if we take a
look at the components of the economy itself, we will obtain some interesting
facts.

On last August, the
Jakarta Composite Index (JCI) dropped from 4,800’s on the beginning of the
month, until reaching 4,484 on August, 19. The market was starting to panic at
the time, but there’s another issue that more attractive to investors: The news
that some public companies, in this case the state-owned banks, would buy back their
shares in public. And I immediately received a lot of questions: Does this mean
that I can buy the shares of Bank BRI (BBRI), Bank Mandiri (BMRI), or Bank BNI
(BBNI)? Because if the company itself has decided to buy shares from the
public, then the price must be already low enough, right?

About two months ago, a
man with bicycle named Elianto Wijoyono stood in the middle of an intersection
in City of Jogja to confront a Harley Davidson convoy, because the convoy was
deliberately going to break through a red light. This action of ‘Bicycle vs.
Harley’ gained a lot of comments on social media, and Elianto explained that he
had planned his action, because he was concerned with the bad behavior of those
motorists which often violate the traffic signals, causes trouble for other
road users in the city of Yogyakarta.

In previous articles we
have discussed that the best time to buy shares of Berkshire Hathaway is when
the price dropped so deep in a given year until its value gap becomes positive
(you can read the previous
article here). And now, this year of 2015 is the first time that Jakarta Composite
Index (JCI) dropped significantly since 2008, that in year to date (until
September, 10) the stock index has dropped 16.1% (While in 2013, the stock
index fell only 1%). So, although some stocks may still rise, but most other
stocks fell significantly compared to their position at the beginning of the
year, even if the equity value of the company is actually still rising. In this
condition, some stocks then create a positive ‘value gap’.

Since taken over by
Warren Buffett in 1964, Berkshire Hathaway (BRK) has made investment gain of a
total of 1,826,163% for anyone who
holds its stock in the last 50 years (until 2014). This means that if you buy
BRK for US$ 1,000 in 1964 and still holding it until the end of 2014, then by
ignoring the factor of inflation, your investment is now worth.. US$ 18.3 million.

Last September, the
management of Bumi Resources (BUMI), the largest mining company in the
Indonesia, announced the company’s latest proposal of debt restructuring. As of
August 31, 2015, the outstanding debt of BUMI stood at nearly US$ 4 billion,
and most of them will mature in less than a year. Given the poor condition of
mining sector, including the price of coal remains low in the last few years,
the company had no choice but to propose the options of debt restructuring to
its creditors.

Last weekend I with
some friends went to climb a mountain, in this case Mount Salak in Sukabumi/Bogor,
West Java, which has an altitude of 2,211 meters above the sea level. In
contrast to other leisure activities which are relaxing, mountaineering requires
physical endurance so I had to exercise regularly for at least a week before
the ascent. Therefore, since the last ascent about two or three years ago, only
last weekend I had the time to do it again. And after cramps, rain, cold, and
thirsty for two days and one night, thank God we successfully reached the summit,
and also successfully returned home.

On Thursday, October 1,
I met face to face with an investor named Joel Cohen, who works for Mitimco, an asset
management company in the US with AUM of approximately US$ 19 billion. Although
I’ve had previously met several investors from abroad (where they came to
Jakarta), but this is my first time to meet someone who represents a large
institution. So for me, it's a brand new experience.

In August 24, 2015, the
Jakarta Composite Index (JCI) fell to 4,164, which was the lowest position of
the index since almost two years ago. And in Thursday, August 27, 2015, the
Indonesia Stock Exchange (IDX), the host and regulator of Indonesian capital market,
finally held a press conference regarding the current condition of the
Indonesian stock market. Here are the points of the conference.

This
morning, the Jakarta Composite Index (JCI) tumbled 2.0% to 4,033 only minutes after
the opening. Shortly after, I receive Whatsapp from one of alumni of my value
investing class, asked about one of the stocks that I recommend (and not only I
recommended it, I buy it as well), let us call it ‘A stock’. He asked, Dear Sir,
is A stock still in your pick list? Because I saw its price fall down this morning.

If you use a standard
method of valuation, then with PER of 22.3 and PBV of 5.2 times at the price of
Rp1,085 per share, Nippon Indosari
Corpindo (ROTI) at first glance seems unattractive. However, if we talk
about ‘wonderful company’ like this company, then we probably can not afford to
buy it at a ‘wonderful price’, or in other words, the current price is fairly
reasonable and worth the buy. And indeed, ROTI is a wonderful company (in
Indonesian language, ‘roti’ means bread), and I'll tell you why.

Whenever the Jakarta
Composite Index (JCI) dropped significantly to a panic level, I usually write a
‘counseling’ article to calm down the investors. However, starting from this
year I will probably let the panic happens, because based on experience, panic
is a normal part of the cycle that occurs in the stock market. I
mean, even if you are desperately trying to calm down the markets, the people
will still throw everthing out because once again, it is a normal part of a
stock market cycle.

In the last two or
three days, I received several emails asking for my opinion related to the
rumors that the International Monetary Fund (IMF), in the next October, will
announce that the currency of China, Yuan or Renminbi (RMB), will be the ‘pair’
for US Dollar (USD) as the world reserve currency. And if the rumors were
right, the USD will no longer be dominant in its position as the world’s major
currency. There will be dramatic changes where institutions/individuals will
immediately convert their USD denominated assets into Yuan, and the value of
the USD would be dropped.

Last Monday, July 27,
2015, is the first day for school students to return to their class after a
long Eid holiday. And for students who entering a higher level of education
(from primary school to the junior high school, from junior school to the high
school, and so on), they would experience the ‘orientation phase’ or, in
Indonesian term, ‘masa orientasi siswa’ or MOS. Although MOS, in some cases, is
more like an bullying activity where the new guy is bullied by senior students,
but based on my own experience back then when I was attending the school/college,
the tradition of MOS is helpful. Most noticeably is the togetherness among junior
students, where we quickly knowing each other because we once 'struggling
together' to work on various tasks. Before the MOS, we did not know each other
at all.

When this article was
written, the Jakarta Composite Index (JCI) is in a position of 4,717, dropped
almost 10% since the beginning of this year. In a condition like this, of
course almost all shares on the Indonesia Stock Exchange (IDX) has been dropped.
But interestingly, based on IDX stats, the index of mining sector has plunged
27.2% during 2015, the worst compared to any other sectors, while in fact the stocks
in this sector have gone down a lot in previous years. Some mining stocks, or
in this case, coal stocks, even fell
more than 90%, if calculated from their peak position in 2011.

Indonesian largest but
-on the other hand- also most indebted coal company, Bumi Resources (BUMI), has just released its financial statements
for the period of first quarter of 2015 (late as usual). And the result? Well,
it’s just getting worse. BUMI reported a net loss of US$ 344 million, leading
to a capital deficiency of US$ 1.2
billion. On its balance sheet, from US$ 5.7 billion of liabilities of the company,
US$ 3.6 billion of which are bank debts that will mature in less than one year. With the current
conditions where the coal price is still falling down, how could BUMI repay
those short-term debts?

On June 12, 2015, having
just scored another new high at 5,178, The
Shanghai Stock Exchange Index (SSE) suddenly fell.. and continue to fall
until reached 3,383 on July 9, or dropped more than 30% in just less than a
month! The stock index were dropped so quickly, to the extent that investors from
around the world, including from Indonesia, raise the question: What is really
going on in China? Is it true that there was a crisis?

In value investing,
there is a very popular term ie intrinsic
value of stock. According to Opa Warren, intrinsic value of a stock/company
is the value of net asset/equity of the company plus the accumulation of net
income that can be acquired in the future, ie as long as the company operates. Thus,
when you see that the equity value of company A is US$ 100 million, for
example, and there is a strong assumption that the company will be able to
generate a decent and consistent earnings over the long term, then the
intrinsic value of the company is usually greater than the equity.

A few days ago, the
Government of Republic of Indonesia issued at least two regulations that are
expected to have a positive impact on the growth of property industry in the
country, which began to slowing down along with the slowdown of national
economy. First regulation is the reduction in the minimum down payment for
purchase of property, from previously 30% to 20% (from the value of the
property) only. Second regulation, foreign investors and individuals are now
allowed to buy property/real estate assets in Indonesia. The announcement of
these regulations are responded positively by investors in the Indonesia Stock
Exchange, where the property stocks jumped significantly in the last two to three
days.

With a market cap of
Rp5,070 trillion or equal to US$ 381 billion on June 19, 2015 the Indonesia Stock Exchange or IDX is of course not one of the largest
stock exchanges in the world. However, if we're talking about its history, the IDX
has a historical background that was more complex than you might imagine.
Including, believe it or not, the first public company in the world whose
shares are traded on the Stock Exchange, they were not based in London, New
York, or Tokyo, but.. Jakarta!

A few days ago I had a
small incident with my family at home. So my 3-year-old daughter was running around
and fell, so her knee scuffed. The next morning, she refused to shower because afraid
that her ‘wound’ would be hurt when exposed to water. Her mother repeatedly
explained that it was just a little sore so it will not hurt, but she kept shouted
'I said no!' Losing patience, her mom also shouted. As a result, it was an
uproar morning at home just because of a small blister on the knee, and the
papa (it’s me) should intervene. After taking her to a playground and slowly
explaining about her ‘injuries’, she finally willing to shower.

After rose 22.3% in
2014, the Jakarta Composite Index (JCI) seems to having a hard time in this
2015. When this article was written, the stock index fell to 4,887 or down 6.5%
from year to date. Considering about the poor conditions of national economy
(we've discussed about this in this website many times before, try to read our
articles since last March), then this situation is not surprising at all, and has
been anticipated before (or at least we’ve anticipate it, I don’t know about
others). If there is no fundamental change in months to come, then most likely
this condition will continue, and consequently the JCI would grow negatively in
this 2015. The question, what should we do?

In the first quarter of
2015, Trada Maritime posted a net profit (attributable to the shareholders of parent
entity) of US$ 0.4 million. Although the figure has risen significantly over
the same period of the previous year, but it is very small compared to the
value of the company's equity of US$ 86.7 million. However, an interesting
story about this TRAM probably not related to its financial performance, but
rather related to its share price that currently slumped at the level of Rp50’s
per share, or extremely low compared to its peak price (in the last one year)
which was Rp1,900 per share. If you read the company’s financial statements
that, although don’t show good fundamentals but also not that bad (the company
still posted a profit, and the equity was still positive), and its PBV at
current prices is only 0.5 times, then as a bargain hunter, you may ask: Is
there an opportunity here?

On Thursday, May 21, one of the big three rating
agencies in the world, Standard & Poor's (S&P), released a change of credit
rating for Indonesia, from previously BB+ with a stable outlook, to BB+ with a
positive outlook. Thus in fact the rating remains the same, only it outlook has
changed to be better. Yet still, the investors respond to this news positively,
where the Jakarta Composite Index (JCI) closed up for the day despite had been
down for a moment in the morning. And on that Thursday, too, the foreign investors
recorded a net buy for the first time in the last few weeks (but they recorded another
net sell on Friday). The question might be, what is credit rating? And how it
affects the economy in Indonesia, especially JCI itself?

On last November 2014, I decided to buy shares in
the construction sector, in this case Nusa
Raya Cipta (NRCA) at an average price of Rp910 per share, because I see
that the sector would probably benefited from the plan of long-term
infrastructure development by President Jokowi, who was inaugurated just a
month earlier. Then why NRCA? Well, that's because, after taking into
consideration about 1. The fundamental/financial performance of the company,
both historically and its latest, as well as 2. The valuation of the shares (in
value investing of our style, we only look at these two things, and only after
that we look at the ‘prospects’), then NRCA is indeed the most sensible option
compared to seven other construction stocks that available in the market. More
details related to NRCA, read again its analysis here.

In recent months, the Indonesian economy at the
level of real sectors outstandingly experiencing bad periods. Some large
companies such as Astra International (ASII), Perusahaan Gas Negara (PGAS),
Gudang Garam (GGRM), Semen Indonesia (SMGR), until Jasa Marga (JSMR), all
recorded a decline in net income in the first quarter of 2015. While in the
smaller businesses, the condition is not much different. Here are some of the
'testimony' I collected from my entrepreneur friends in several cities in
Indonesia.

As you
know, currently
about 90% of listed companies on the Indonesia Stock Exchange has
released their
financial statements for the period of First Quarter
2015. The bad news, most of them had an unsatisfactory performance. Even reputable companies
like Astra
International (ASII) recorded a decline in profits of more than 15%, the
worst in the last 10 years. Seeing these facts, no wonder that in the past several days the Jakarta Composite Index
(JCI) fell by almost 7% (although it later rebound). Because I myself, if I own ASII or
other stocks whose company had a poor performance, I would certainly going to sell it.

In April 2014, Wijaya Karya (WIKA), one of the
state-owned construction company in Indonesia, brought one of its subsidiary, Wijaya Karya Beton (WTON), to the
Indonesia Stock Exchange through IPO. The proceeds were Rp1.2 trillion (about
US$ 100 million), and the initial price of WTON was Rp590 per share. Before the
IPO, the equity value of WTON was only Rp680 billion, which after divided by
6.7 billion shares, then the book value per share of the company was Rp102 per share. So it is quite clear
that the public investor has paid the new shares of WTON at a very expensive
price, ie almost 6-fold higher (590 versus 102) than the price ‘paid’ by WIKA
as the majority shareholder of WTON.

Warren Buffett once said
in one of his annual letter, ‘We like to invest in companies that are already
established and operated for more than 100 years. We do not want to take the
risk by invest in startup companies that do not have a long track-record of
performance.’ In short, Buffett prefers to invest in mature and
well-established companies rather than ‘brand new’ ones. However, when this
principle is applied in Indonesia, investors may find it difficult. Because,
from about 500 companies that listed on the Indonesia Stock Exchange, how much
of them that have been established for more than 100 years? The fact is, our
beloved country (Republic of Indonesia) was proclaimed in 1945 or seventy years
ago, and the Jakarta Composite Index (JCI) itself was launched in 1983.

Some time ago I received a question from a friend
(damn I have a lot of friends, thanks to this blog) which sounds like this,
"Dear Sir, there are several companies on the Indonesia Stock Exchange
which had a consistent growth performance, the share price is low, and the management
apply the good corporate governance. But still the shares are illiquid and hard
to move, one of which may Mandala Multifinance (MFIN) that you recommend.'

Diversification is an important element in
investing in stocks, mainly to reduce the risk of losses, and in this blog we
have discussed the theme of 'diversification' several times, for example in this article, and this. I probably need to say once more that, if you
imitate the style of Warren Buffett on diversification, then you can hold about
15 to 20 different stocks in your portfolio. In the 1960s, when still managing
Buffett Partnership with funds under management of approximately US$ 40
million, Warren Buffett was only holding about 20 stocks in his portfolio.

On Thursday, March 19, 2015, chairwoman of Federal
Reserve, Janet Yellen, said that the Fed (a popular term for Federal Reserve,
which is the Central Bank of the United States of America) is not in a hurry to
raise its benchmark interest rate, or known as the 'Fed Rate'. Shortly after the statement was released, stock indices
in Europe and Asia increased significantly. Prior to the statement, investors
in Europe and Asia, including Indonesia, were concerned that if the Fed raised
the Fed Rate, then the foreign funds in the local stock markets will be
withdrawn to be placed in the US. In the view of global investors, if the
benchmark interest rate was higher, then investment in the United States will
offering higher yields, while on the other hand the risk is still considered to
be very low because the US is a country with the largest economy in this
world.

Based on data from Bank Indonesia (BI), on March
14, 2015, Rupiah closed at the position of Rp13,191 per US Dollar, and this is
the lowest level for the Indonesian currency towards the US Dollar since.. well..
the financial crisis in 1998. So although in the past two years I was trying to
ignore the macro-economic developments in the country in order to be focus on
the company's fundamentals in investing in the stock market, but this remains
an issue, because even in 2008, at the peak of global crisis, the exchange rate
of Rupiah had never drops to as low as today. Back to 2008, Rupiah only dropped
to Rp12,768 per US Dollar as its lowest point, before then immediately return
to the normal level of Rp9,000’s per US Dollar.

Some time ago I met with an old friend (we meet
regularly every 2 – 3 months for small chit chat), and we talked about stock
investments and others. Coincidentally a few days earlier, this friend of mine
had just met with one of the hottest figures in Jakarta: The Governor of Jakarta, Mr. Ahok, in one event of gathering. In
the forum Mr. Ahok talked much about this and that, and my friend told me that
he was a fun person! Previously my friend did not ever notice about Ahok, but
after the gathering, he explicitly said that he liked the governor.

Bank BTN (BBTN) had a rather poor financial
performance in 2014 in which its net profits fell from Rp1.6 trillion in 2013, to
only Rp1.1 trillion in 2014, or down 28.6%. Although seem disappointing, but in
fact this is the first time in the last eight years in which the company
recorded a net profit that is down over the previous year (in 2006, BBTN profits
were down compared to 2005, but it was because in 2005 the company did not do a
provision for the payment of taxes). While between 2006 and 2013, the bank profits
continue to rise consistently, as well as its equity.

On yesterday, Monday February 23, 2015, Jakarta
Composite Index (JCI) closed at 5,403, which is recorded as the highest
position in history so far. In friendly market conditions like these days, most
of the stocks on the Stock Exchange are keep breaking their highest price
records. However, some stocks has a different story in which they are not
rising but falling instead. And one of them is Logindo Samudramakmur (LEAD), which is currently traded at Rp1,845
per share, or waaayy below its peak position ie 5,325. In contrast to some
other stocks that fell either because lack of fundamentals, or because the
company’s financial performance has decreased, or because of certain negative
sentiments, then LEAD seems to have no problems. Is this an opportunity?

Warren Buffett once stated one of his famous quotes:
"It is far better to buy a wonderful company at a fair price, than a fair
company at a wonderful price." If we notice, in the sentence Buffett
stated that in selecting stocks to buy then we have to choose one best factor,
whether it is the lowest possible price, or the highest quality of the company's
fundamentals. Is almost impossible for any value investor to be able to find a
company with a very, very good fundamentals, but on the other hand it is sold
at a very, very low price. So, in this case, Opa Warren prefers 'wonderful
company at a fair price'. Not necessary low price, as long as not too
expensive.

But hey, what if we could find a stock like that?
That is, a very good stock which is sold at a very low price?

If you want to invest in the Indonesian Stock Market
through mutual funds, one way in determining the quality of mutual funds is by
looking at the track record of the fund’s performance in the long term, say
five years. If the compound annual growth rate (CAGR) of a mutual fund is
better than CAGR of Jakarta Composite Index (JCI) in the same period, then we
could simply said that it has a good performance. If the difference is fairly
large, say 17% per annum while the CAGR of JCI over the same period was only 7%
(so that the difference reaches 10%), then it is even better.

Some time ago a friend of mine asked me, 'What is
the capital expenditure?' And I realized that although we have discussed a lot
of things in this website, but we has never discussed about capital
expenditure, or commonly abbreviated as capex. While in fact, the factor of capex
is important in analyzing the prospects of a stock, since it answered the
question, 'What is the company doing to gain additional revenue/profit in the
future'. Therefore, we will also discuss it here, of course, with some easy
words. Here we go!

Every time I held a seminar/training of value
investing, I provide an opportunity for participants to ask questions through
email about investing in stocks. And well, there is an incoming email which
seems to represent the majority of questions from investors, especially beginner
investors aka the newbies. Therefore, I write this article. Actually, for those
of you who are new in the stock market (has become an investor less than 1
year), you may have hundreds of questions in your head. But hopefully this
article can at least answer some of these.

On Friday 16th January, for the first time in
history, the government of Republic of Indonesia intervened the cement industry
by announcing a decrease in the price of cement at a maximum of Rp3,000 (abour
US$ 0.25) per sack. And the result is predictable: The stocks of cement on the
Stock Exchange collapsed immediately. On that Friday, the stock of Semen Indonesia
(SMGR) fell 7.4% from16,200 to 15,000, and dropped further to the level of Rp14,100
per share on the next trading day. Other cement stocks like Semen Baturaja
(SMBR), Holcim Indonesia (SMCB), and Indocement (INTP), all three also fell
between 4.9 to 12.2% in two trading days after the cement price reduction
policy was announced.

Some time ago I met a friend, a senior investor,
and we talked a little bit about one of the most famous stock investor in
Indonesia: Mr. Lo Kheng Hong (LKH).
According to this friend of mine, LKH deserves not to be called as 'Warren
Buffett of Indonesia', because there are some fundamental differences (of way
of investment) between LKH with Buffett. For example, LKH is not a long-term
investor like Buffett. In 2002, LKH bought United Tractors (UNTR) at the price
of Rp400 per share, but in only 3 years later he had it sold. While Buffett,
since he bought the shares of Coca-Cola in 1989, until today, or more than 25
years later, these shares are still in the portfolio of Berkshire Hathaway.

On Friday, January 2, 2015, President Jokowi
inaugurate the opening of the first trading day in stock market in 2015, at the
Stock Exchange Building, Jakarta. Although in the last few years, the opening
of the stock market at the beginning of a year is regularly attended by the
President of Republic Indonesia, but the presence of Jokowi was special because
we all knew that, related to the tragedy of Air Asia, he had to go from Papua -
Jakarta - Pangkalan Bun – Surabaya, and back to Jakarta again in a matter of
days, and that's not including fulfilling the state duties such as receiving
George Soros at the Palace, held a meeting with the ministers related to fuel
prices, and appointed several new military high officials. However, he still
had time to came to the Stock Exchange and also present on time (before the
market opened at 09.00 AM), while before that (in the same morning) he visited the
market of Tanah Abang first! To ‘blusukan’ as usual, and also to open the trading
activities at the market.

Some time ago I received a suggestion from a
friend, 'Dear Sir, I know that you are a value investor who tends of using
fundamental analysis. But as we know, in the market, there are more technicalists
than fundamentalists. So what if you also write about analysis of a stock from
a technical perspective? Your website will have more readers.'